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It's really impossible to predict because most of the supply that comes to meet demand is from existing bitcoin holders. At what price do they decide to exercise some of that bitcoin optionality?

If most hodlers decide that they're not selling any until at least $1m, the ratio might be much higher than 20:1. As each cycle passes, the conviction of hodlers increases & so does the number of hodlers with conviction. More sats become not for sale (at any price) as the sats get more evenly distributed.

Hans Karlsborn 2y ago

Yes. The relation must be dynamic and cannot be analysed as If it were a static relationship between inflows of money and appreciation in price.

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Discussion

Brisket 2y ago

During the last bull, much demand was met with paper bitcoin not backed by anything. Supply side scarcity didn't factor in as much as it should have & people learned a tough lesson about bitcoin.

I feel that if people are turning to bitcoin because of a lack of trust in fiat & banks, they will want to reduce/remove third party risk. Maybe I overestimate their understanding of Bitcoin, but a lack of third party risk was a large & obvious feature for me.

Let's see how this pans out.